As we have previously written about in Tax matters, the Supreme Administrative Court on 15 April 2016 ruled that a Swedish securities fund has the right to a certificate of residence in applying the double taxation treaty between Sweden and Spain. The Tax Agency has published comments to this legal case and has announced a more restrictive interpretation than was generally expected.
The Tax Agency’s understanding is that the decision implies that a party’s intention when entering into a tax treaty, which is seen in amongst other things the statements in the preparatory work, is to be considered in interpreting the treaty. If it is seen in the preparatory work that the treaty is not to apply to persons incurring only a formal liability for taxes, then the Tax Agency cannot issue a certificate of residence.
Furthermore, the Tax Agency states that when it comes to tax treaties concluded after the funds were made exempt from taxation in Sweden (that is from and including 2012), such tax treaties have previously not applied to these funds. Consequently, as regards these agreements, the presumption is that the funds are not covered by the tax treaty unless stipulated otherwise in the treaty or unless indicated by general statements from either both or one of the parties to the treaty.
The above approach is, according to the Tax Agency, to apply to both securities funds (UCITS funds) and special funds.
The Tax Agency’s interpretation of the Supreme Administrative Court’s decision regarding Swedish funds means that the uncertainty whether Swedish funds have access to tax treaties remains in relation to a number of countries. In its comments, the Tax Agency does not provide any list of which tax treaties that entitle or do not entitle to residence certificate. However, it is said that the Tax Agency will update its previously policy statements in this area, that is as originally found in “Swedish investment funds and tax agreements” (Reg. No. 131125271-12/111) of 24 April 2012 and ”Taxation of dividends from Swedish investment fund to recipient who, based on the tax treaty, has residence in another country” (Reg. No. 131606012-13/111) of 4 October 2013. These updates may include further guidance on the Tax Agency’s position regarding this matter.
Stefan Carlsson and Daniel Glückman
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